Products April 4, 2011

Columbia Management Launches Absolute Return Funds

Columbia Management launched two open-end mutual funds: the Columbia Absolute Return Multi-Strategy Fund and the Columbia Absolute Return Enhanced Multi-Strategy Fund.
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The Columbia Absolute Return Multi-Strategy Fund (CMSAX) targets long-term returns similar to historical returns of investment-grade bonds, but with lower volatility and low correlation to the Barclays Capital U.S. Aggregate Bond Index. The Columbia Absolute Return Enhanced Multi-Strategy Fund (CEMAX) targets long-term returns similar to historical returns of equities, but with lower volatility and low correlation to the S&P 500 Index.   

The portfolio managers are Todd White, head of alternatives and absolute return investments at Columbia Management, and Kent Peterson, a senior portfolio manager with the asset allocation team at Columbia Management.  

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White joined Columbia Management in 2008 and has 25 years of industry experience including positions at HSBC, as global head of asset-backed and mortgage-backed securities, and at Lehman Brothers. He received a B.S. in finance from Indiana University.   

Peterson joined the firm in 2006 and has 12 years of industry experience. Prior to joining Columbia Management he was with Bridgewater Associates. He earned a B.A. from Cornell University and a Ph.D. from Princeton University.   

For more information on the funds, visit http://www.columbiamanagement.com/absolute-return/.
Compliance April 4, 2011

AIG Stock-Drop Claims Survive Dismissal Attempt

American International Group (AIG) must face claims by some current and former employees that their retirement funds were invested too heavily in company stock, Bloomberg is reporting.
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U.S. District Judge Laura Taylor Swain ruled AIG and some directors, including former board member and Chief Executive Officer Martin Sullivan must defend allegations of a breach of fiduciary duty in a lawsuit filed in 2008. She dismissed claims by participants in a Puerto Rican unit’s retirement plan.

According to Bloomberg, the judge said the remaining plaintiffs can try to prove that they sustained losses to their pension plans caused by the defendants breaching their duty by continuing to invest in AIG stock even when the company was on life-support; shares fell 97% in 2008.

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“Plaintiffs have sufficiently alleged that AIG and the director defendants were aware of the increasingly risky financial position maintained by AIG, material weaknesses in AIG’s financial health and the potential impending erosion of the value of AIG’s stock,” Swain wrote, according to Bloomberg.

Mark Herr, an AIG spokesman, said in an e-mail to Bloomberg: “We’re pleased the court dismissed portions of the case and will defend vigorously against the remaining claims.”

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